Objective

Current income and long-term capital appreciation

Strategy

Uses top down macroeconomic analysis, along with fundamental industry and company research, to capture inefficiencies in the valuation of sectors and individual securities; this is combined with duration management (+/– 2.5 years of the benchmark) in pursuit of above-benchmark returns over a full market cycle

Fund Facts
Asset Manager
  • Longfellow Investment Management(Since 5/1/13)
  • Reams Asset Management Co.(Since 5/1/13)
Benchmark Bloomberg Barclays 1-5 Year Government/Credit
Fund Inception Date Class A & Class B: May 1, 2013
Mimimum Investment Class A: No minimum; Class B: $5 million
Expense Ratio Class A: 0.56%; Class B: 0.41%

Annual Average Total Returns
(%) as of 12/31/2018

Trailing 3 Months 1 Year 3 Years 5 Years 10 Years
CUIT Opportunistic Bond Fund Class A 0.56 0.82 1.66 1.44 -
CUIT Opportunistic Bond Fund Class B 0.59 0.96 1.81 1.58 -
Bloomberg Barclays 1-5 Year US Government/Credit Index 1.46 1.38 1.40 1.32 -
Calendar Year 2017 2016 2015 2014 2013
CUIT Opportunistic Bond Fund Class A 1.63 2.54 0.98 1.23 *
CUIT Opportunistic Bond Fund Class B 1.78 2.69 1.23 1.27 *
Bloomberg Barclays 1-5 Year US Government/Credit Index 1.27 1.56 0.97 1.42 *
Statistics Fund Index
Average Maturity (Yrs) 3.11 2.78
Effective Duration (Yrs) 2.35 2.59
Average Quality A+ AA
Yield-to-Maturity 3.6% 2.8%
Current Yield 3.2% 2.5%
# of Securities 332 2,908
Fund Size $414.3MM
Effective Duration Fund Index
< 1 Year 19.1 2.5
1 - 3 Years 46.7 62.0
3 - 5 Years 30.1 35.5
5 - 7 Years 3.9 0.0
7 - 10 Years 0.1 0.0
10 - 20 Years 0.2 0.0
> 20 Years 0.0 0.0
Market Sector Analysis Fund Index
Treasury and Gov’t Related 22.4 73.2
Corporate 44.7 26.8
MBS 4.5 0.0
CMBS 9.7 0.0
ABS 10.1 0.0
Merger/Arbitrage 7.4 0.0
Cash 1.3 0.0
Credit Quality Fund Index
AAA 39.5 69.8
AA 4.9 5.7
A 19.4 11.4
BBB 24.3 13.1
Below BBB 3.3 0.1
Merger/Arbitrage 7.4 0.0
Cash 1.3 0.0
Risk Metrics Fund
(5 YR)
Index
(5 YR)
Standard Deviation 0.9 1.3
Tracking Error 0.7 0.0
Sharpe Ratio 1.5 0.6
Information Ratio 1.0 -
Upside Capture 93.5 10.0
Downside Capture 25.8 100.0

Bond allocation for Fund Statistics, Effective Duration and Credit Quality exclude M&A.

  • Q4 2018 Performance Review

    12-Month Review

    • Shorter relative duration (2.4 vs 2.6 years) added ~14 bps to overall performance as the Federal Reserve increased Fed Fund rates in December to the range of 2.25 – 2.50%.
    • Curve positioning was slightly positive for the trailing twelve months.
    • Sector allocation was additive (+8 bps), as the Fund’s overweight to securitized and corporate areas delivered positive results for the period.
    • In a sharp reversal from the previous year, security selection detracted from results, (-16 bps) as Industrials and financials underperformed. In particular, names in Energy and Banking were some of the weaker performing securities.
    • It was a difficult year for the fund’s M&A strategy, as several merger agreements were terminated in 2018. Difficulties stemmed from tighter deal spreads along with geopolitical & regulatory pressures. Year to date, the sub-advisor invested in 87 deals and closed 74, however six of the deals were terminated. Although there were a few bright spots in the portfolio some of the larger deals such as offset positive gains. M&A exposure ended the year at ~ 7.4%.

    3-Month Review

    • In a reversal from the previous quarter, the Fund’s shorter duration (2.4 vs 2.6) detracted from performance as rates declined across the 2 to 30 year range.
    • The Fund’s yield curve positioning was relatively flat for the period as yields declined roughly 30 to 40 bps in short to intermediate maturities (2 – 5 Yr. buckets).
    • The combination of sector and security selection (~48 bps) were the main areas of weakness as the fund’s underweight to Treasuries and the dramatic spread widening in corporates negatively impacted relative performance. Specifically, Financial holdings in Banking and Industrial exposure to names in Energy and Communication were the weaker performers for the quarter.
    • The Merger/Arbitrage sleeve trailed the index as deal spreads faced mark-to-market pressure during the broad risk-off environment during the fourth quarter.

    Current Positioning

    • In terms of interest rate risk, the Fund remains defensively positioned with a lower duration than the benchmark and continues to maintain a relative yield advantage, with YTM at 3.6% vs 2.8% for the index.
    • With regards to sector allocation, the sub-advisors continue to emphasize corporates and securitized sectors, which is supported by a continued underweight to Treasuries. Although near-term volatility has widened spreads for both corporates and securitized holdings, the sub-advisors believe they are attractively priced for long-term outperformance. The combined weight of corporates and securitized represents ~70% of the Fund’s exposure.
    • The high yield sector has become more attractive as spreads widened towards the later part of the year; however, the sub-advisors are cautious about adding risk and are being more selective in including new opportunities.
    • With regards to M&A, Longfellow will focus on transactions that have the most attractive risk/reward profile and clear path to completion. Some of the most notable areas of opportunity entering 2019 are deals related to Special Purpose Acquisition Companies, given their risk profile and optionality. Additionally, as merger deals are completed during the year, the sub-advisor expects to benefit from several fixed income securities which will be called/tendered upon the completion of upcoming mergers.
  • Fund Fact Sheet

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